Homeownership isn’t for everyone. Roughly 43 million American households have opted to rent rather than buy their homes because of convenience, cost or both. But renting isn’t always a cheaper or better alternative to owning a property. The right road to take depends on a variety of factors, including an individual’s or family’s financial means and how well the local real-estate market is doing.
As the COVID-19 pandemic has hit the U.S. this year, rents have experienced “pandemic pricing,” dropping to attract new customers in the difficult market. For most of 2020, average rent prices have been lower than they were last year, though in July they have started to exceed 2019’s rates slightly. At the same time, mortgage rates have seen record lows while home prices have risen.
Like home prices, however, rental rates can vary significantly by region, state or city. And in some places, renting will prove to be more cost-effective and a better overall value than owning.
To determine where renters can get the most bang for their buck, WalletHub compared more than 180 rental markets based on 24 key measures of rental attractiveness and quality of life. Our data set ranges from the difference between rental rates and mortgage payments to historical price changes, the cost of living and job availability. Read on for our findings, expert insight from a panel of researchers and a full description of our methodology.
Best Places to Rent
(1 = Best)
|City||Total Score||‘Rental Market & Affordability’ Rank||‘Quality of Life’ Rank|
|4||Rapid City, SD||56.89||2||120|
|5||Sioux Falls, SD||56.81||3||113|
|7||Cedar Rapids, IA||56.54||8||69|
|14||Overland Park, KS||54.34||37||32|
|20||South Burlington, VT||53.46||75||6|
|22||Las Cruces, NM||53.22||22||75|
|23||El Paso, TX||52.96||33||60|
|24||Virginia Beach, VA||52.86||19||84|
|28||Newport News, VA||52.08||10||126|
|29||Colorado Springs, CO||51.99||100||10|
|32||Fort Smith, AR||51.12||6||159|
|33||Des Moines, IA||51.07||29||91|
|38||San Francisco, CA||49.58||83||43|
|43||Santa Rosa, CA||48.78||142||9|
|44||San Diego, CA||48.64||162||2|
|49||Oklahoma City, OK||48.21||44||107|
|51||Grand Rapids, MI||47.89||86||64|
|55||Little Rock, AR||47.75||13||170|
|56||Jersey City, NJ||47.66||28||138|
|70||Huntington Beach, CA||46.90||159||5|
|73||San Antonio, TX||46.71||61||103|
|77||Corpus Christi, TX||46.47||41||125|
|78||New York, NY||46.46||123||54|
|79||Las Vegas, NV||46.43||130||45|
|81||Rancho Cucamonga, CA||46.35||147||18|
|86||Chula Vista, CA||46.19||154||19|
|91||Grand Prairie, TX||45.57||134||48|
|93||Fort Worth, TX||45.48||97||87|
|95||St. Louis, MO||45.26||24||168|
|97||Kansas City, MO||45.23||55||134|
|105||St. Petersburg, FL||44.57||149||44|
|106||Pearl City, HI||44.55||155||26|
|108||West Valley City, UT||44.37||115||83|
|111||St. Paul, MN||44.15||129||77|
|113||Fort Wayne, IN||44.07||64||139|
|120||Santa Clarita, CA||43.47||161||33|
|126||Salt Lake City, UT||43.27||105||109|
|127||North Las Vegas, NV||43.19||127||94|
|129||Pembroke Pines, FL||43.09||168||29|
|131||San Jose, CA||42.97||166||37|
|133||Garden Grove, CA||42.90||176||7|
|144||Moreno Valley, CA||42.00||146||74|
|145||Long Beach, CA||41.98||170||49|
|146||Baton Rouge, LA||41.90||94||145|
|150||Los Angeles, CA||41.12||173||55|
|151||Cape Coral, FL||40.96||179||28|
|156||Port St. Lucie, FL||40.61||178||38|
|164||Santa Ana, CA||39.01||180||53|
|167||Fort Lauderdale, FL||38.56||163||101|
|170||New Orleans, LA||37.70||144||151|
|171||New Haven, CT||37.56||157||122|
|172||San Bernardino, CA||37.44||158||124|
Ask the Experts
Finding a suitable rental unit is a similar process to buying a home. Your search may be based purely on cost or also on needs, such as the number of bedrooms or close proximity to work. For guidance, we asked a panel of experts to share their thoughts on the following key questions:
- What tips do you have for a person looking to get the best value in an apartment?
- What are the most common mistakes that renters make when searching for a new apartment?
- In evaluating the best and worst cities for renters, what are the top five indicators?
- What listing details have become more important when searching for a place to rent during the current economic crisis?
- Are the fastest growing cities a good place for renters? Why?
- How can local policymakers make housing more affordable for renters without upsetting homeowners?
Ask the Experts
In order to determine the best local rental markets, WalletHub compared 182 cities — including the 150 most populated U.S. cities, plus at least two of the most populated cities in each state — across two key dimensions, “Rental Market & Affordability” and “Quality of Life.”
We evaluated those dimensions using 24 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for renters. Data for metrics marked with an asterisk (*) were available at the state level only.
Finally, we determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample. Our sample considers only the city proper in each case and excludes cities in the surrounding metro area.
Rental Market & Affordability – Total Points: 60
- Share of Renters: Full Weight (~2.79 Points)
Note: This metric specifically measures the share of renter occupied housing units among total occupied housing units.
- Rental Vacancy Rate: Full Weight (~2.79 Points)
- Sublet Laws-Friendliness*: Full Weight (~2.79 Points)
- Average Home Square Footage: Half Weight (~1.40 Points)
- Share of Newer Homes: Full Weight (~2.79 Points)
Note: “Newer Homes” include housing units built between 2010 and 2018.
- Rental Affordability: Triple Weight (~8.37 Points)
Note: This metric was calculated as follows: Median Gross Rent / Median Annual Household Income.
- Share of Apartment Community Pillar Listings: Full Weight (~2.79 Points)
Note: A Community Pillar landlord has agreed to relax their standard tenant screening process in order to help applicants with potential rental barriers—such as low incomes, spotty credit scores, unemployment, or lack of housing references—be able to obtain housing.
- Historical Rental-Price Changes: Triple Weight (~8.37 Points)
Note: This metric specifically measures the year-over-year change in rent prices (2020 vs. 2019 vs. 2018).
- Forecasted Change of Median Rent: Double Weight (~5.58 Points)
- Share of Severely Cost-Burdened Renter Households: Full Weight (~2.79 Points)
Note: “Severely Cost-Burdened Renter Households,” as defined by the U.S. Department of Housing and Urban Development, refers to consumers who spend at least 50 percent of their income on housing.
- Average Annual Renters-Insurance Premium*: Full Weight (~2.79 Points)
- Rent-to-Price Ratio: Full Weight (~2.79 Points)
- Cost of Living: Triple Weight (~8.37 Points)
- Buy vs Rent Breakeven Horizon: Full Weight (~2.79 Points)
Note: The “breakeven horizon” is defined by Zillow as the point, in years, at which buying a home becomes less expensive than renting the same home.
- Security-Deposit Limit*: Full Weight (~2.79 Points)
Note: This metric measures the maximum security-deposit amount that landlords are allowed to charge in the state. A lower amount is ideal for renters.
Quality of Life – Total Points: 40
- City Satisfaction Ranking: Full Weight (~4.00 Points)
- Job Market: Full Weight (~4.00 Points)
Note: This metric is based on WalletHub’s “Best & Worst Cities for Jobs” ranking.
- Driver-Friendliness: Half Weight (~2.00 Points)
Note: This metric is based on WalletHub’s “Best & Worst Cities to Drive in” ranking.
- Recreation-Friendliness: Full Weight (~4.00 Points)
Note: This metric is based on WalletHub’s “Best & Worst Cities for Recreation” ranking.
- Weather: Half Weight (~2.00 Points)
Note: This metric is based on WalletHub’s “Cities with the Best & Worst Weather” ranking.
- Quality of Public School System: Half Weight (~2.00 Points)
Note: This metric is based on GreatSchools.org’s ratings of U.S. public schools.
- Safety: Double Weight (~8.00 Points)
Note: This metric measures the violent- and property-crime rates.
- Presence of State Bedbug Laws*: Half Weight (~2.00 Points)
Note: This binary metric measures the presence or absence of bedbug laws in the state. Bedbug laws address bedbug infestations in rental properties.
- WalletHub's "States Offering the Most Coronavirus Support" Score*: Triple Weight (~12.00 Points)
Note: This metric is based on WalletHub's "States Offering the Most Coronavirus Support" ranking.
Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Council for Community and Economic Research, Zillow, Harvard Joint Center for Housing Studies, Insurance Information Institute, Department of Housing and Urban Development, Flex Zone, Gallup, Federal Bureau of Investigation, Regents of the University of California, GreatSchools.org, NOLO and WalletHub research.
Videos for News Use: